Wednesday, October 31, 2012

For-profit education company DeVry Inc. (NYSE:DV) late
Thursday reported a 44 percent fall in its first quarter profit as enrolment
numbers fell, but still managed to beat Street expectations.

New government regulations and the impact of increased
scrutiny into their operations have hit for-profit education companies such as
DeVry.

They have been accused of providing poor education,
saddling students with high debt while very few students graduate out of these
institutions.

The federal government has clamped down on these
institutions, which now have to meet stringent criteria or risk losing federal
aid for students that make up a substantial portion of the revenues of these
schools.

On the other side the institutes have also made
admission procedures much stricter and the effect has been felt on lower
enrolments.

The school's net income fell 44 percent to $32
million, or 49 cents per share, for the quarter that ended Sept. 30. That
compares with $57.5 million, or 83 cents per share, a year earlier.

Its total revenue fell 7 percent to $482.7 million.

Analysts were expecting the company to earn 30 cents
per share for the period on revenue of $482.5 million.

Shares of the company soared about 25% to $26.01 in
Friday’s session.

It has taken some cost cutting measures as it lowered
expenses through job reductions and also acquired a Brazilian institute to
improve its revenues and reach.

The institute managed to cut $27 million in costs in
the first quarter.